Have you been contacted by Specialty Capital regarding an outstanding debt? Here’s how to find out if this firm is legitimate, how to handle communications with them, and how to resolve your Specialty Capital debt in the best way possible.
Who is Specialty Capital?
Headquartered in New York, Specialty Capital is a non-bank financial services firm that focuses on small business financing. They offer revenue-based financing by evaluating businesses based on revenue trends — often just four months of stable or increasing revenue — to qualify for funding, without requiring a strong credit score or lengthy financial history.
Is Specialty Capital Legitimate?
Yes — Specialty Capital is a legitimate financial services provider that was founded in 2020. Customer reviews are generally positive.
That said, if you’re considering working with Specialty Capital, be sure you understand all the terms, especially since revenue-based financing can differ from traditional loans. Compare them with other funding options to ensure you’re getting the right fit both financially and operationally. Often, other types of business financing are more affordable and have more protections in place in case you run into financial difficulties.
Specialty Capital Reviews and Complaints
Specialty Capital is accredited by the Better Business Bureau and holds an A+ rating. It had two complaints filed in the last three years, and two complaints closed in the last 12 months.
However, the BBB page does not publicly display details regarding complaints against Specialty Capital. The website notes, “Some complaints may not be published due to the submitter’s preference, BBB’s publication standards, or the volume of complaints received about a particular business.”
Understanding How Specialty Capital Operates
Specialty Capital is a non-bank lender that specializes in revenue-based financing (RBF). That means instead of lending money based on collateral or strong credit history, they advance capital to small businesses based on recent sales and revenue trends. This type of funding is also known as a merchant cash advance (MCA).
Specialty Capital often structures funding as a multi-draw advance, meaning businesses can take smaller amounts over time instead of one large loan. Additionally, payments are tied to a fixed percentage of daily or weekly sales/revenue until the advance, plus fees, are repaid.
What Should I Do If I Receive a Letter or Call from Specialty Capital?
First, don’t ignore communications from Specialty Capital. Even if you’re unsure what it’s about, ignoring it could make things worse. Responding promptly helps you avoid surprises like frozen bank accounts and payment processing systems, aggressive collections, or being sued.
Also, be sure to document everything. Keep copies of all letters, contracts, and emails. If you talk to someone over the phone, note the date, time, and the name of who you spoke with.
Documentation is crucial if there’s ever a dispute or legal escalation.
Handling Communications from Specialty Capital
If you receive a call or letter from someone claiming to be with Specialty Capital, make sure it’s actually them. Scammers sometimes impersonate lenders. You can compare the phone number or email against the official Specialty Capital website or BBB listing.
If someone calls regarding an MCA you have with the company, request a copy of any alleged debt or agreement in writing. Then compare it with your own records; if something doesn’t look right, you may have the right to dispute the debt in writing.
If you’re unsure how to proceed, speak with a business debt attorney or a business focused debt settlement professional who understands merchant cash advances and revenue-based financing. They may be able to help protect your business from aggressive collection tactics.
Knowing Your Rights With Specialty Capital
Your rights when dealing with Specialty Capital (or any non-bank commercial finance company) are different then when dealing with a consumer lender like a credit card issuer or mortgage company. Here’s what you should know:
Consumer vs. Business Rights
Specialty Capital provides business financing, so many consumer protection laws (like the Fair Debt Collection Practices Act) do not automatically apply, since the debt is tied to a business. However, you still have rights under federal, state, and contractual law.
Right to Clear and Accurate Information
You have the right to receive written documentation of any financing agreement, including:
- Total advance amount
- Fees or factor rates
- Repayment structure (daily/weekly debits, percentage of revenue, etc.)
- Any prepayment discounts or penalties
Some states (e.g., New York, California, Virginia, Utah) now require “Truth in Lending” style disclosures for small business financing. If you’re in one of these states, Specialty Capital must provide standardized cost disclosures.
Right to Verification of Debt
If they claim you owe money from an MCA, you can request a copy of the original signed agreement and an accounting of payments made and the balance remaining. This prevents being pressured to pay amounts you don’t actually owe.
Right to Fair Treatment
Even though FDCPA may not apply, lenders and funders are prohibited from making false statements about what you owe, threatening illegal actions, or harassing you or your business contacts. If collections cross the line into harassment, you may have legal recourse under state unfair trade practices laws.
Right to Legal Representation
You always have the right to consult a business debt attorney. If Specialty Capital threatens legal action for a debt you owe, an experienced debt attorney can help protect your assets.
State-Specific Protections
Note that New York (where Specialty Capital is based) requires disclosure rules for small business financing, giving borrowers more transparency. California, Virginia, and Utah have similar commercial financing disclosure laws.
Some states also have restrictions on confessions of judgment (COJs), which are sometimes used in merchant cash advance agreements. If you signed a COJ outside of New York, enforcement may be limited.
The Legal Side of Specialty Capital
Even though Specialty Capital is a legitimate financing company, the type of financing they offer can come with unique legal pitfalls. Here are the most common legal issues business owners may run into:
- Confessions of Judgment: Some MCA providers use COJ clauses in contracts. A COJ allows the lender to obtain a judgment against you without a trial if you default. Although New York has banned COJs for out-of-state borrowers, they may still appear in contracts. If enforced, it could lead to bank account freezes or asset seizures very quickly.
- Personal Guarantees: Specialty Capital may require a personal guarantee, meaning your personal assets (bank accounts, home equity) may be at risk if the business defaults. Disputes can arise when a borrower argues that liability should be limited to the business entity, not them personally.
- High Cost and Disclosure Issues: Some MCA borrowers claim they weren’t fully informed about effective interest rates or repayment obligations. A dispute may arise if Specialty Capital failed to provide required disclosures or if costs were misleading.
- Breach of Contract Claims: Specialty Capital may allege breach if you stop making payments (even if revenue drops), you withhold bank statements (many agreements require ongoing access to your accounts), or you take on additional financing without consent. On the flip side, businesses sometimes claim breach by the funder, arguing that debits exceeded agreed percentages or repayment terms weren’t honored.
What Happens If You Get Sued by Specialty Capital?
If you (or your business) get sued by Specialty Capital, it typically means they believe you’ve defaulted on a financing agreement. This can be stressful, but knowing what to expect — and what options you have — can make a big difference.
Here are the steps you should take if you’re sued by Specialty Capital:
- Do not ignore the summons: Ignoring means automatic judgment against you.
- Read the complaint carefully: Identify what they claim you owe and why.
- Gather your records: Including contracts, bank statements, communications.
- Consult an attorney: Ideally one with MCA or revenue-based financing experience.
- Consider negotiating: Sometimes reaching out quickly leads to a settlement before the case escalates.
How to Negotiate with Specialty Capital
If you’re struggling to keep up with payments, you may be able to negotiate an alternative payment plan or settlement with Specialty Capital.
Negotiation Strategies
- Lump-Sum Settlement: This is when you offer to pay a portion of the balance up front in exchange for cancelling the rest of the balance. Funders may prefer a guaranteed partial recovery now over risking collections or bankruptcy later.
- Payment Restructuring: You can also request a lower holdback rate in order to better manage payments. Emphasize that keeping payments reasonable ensures they’ll get paid instead of forcing default.
- Temporary Forbearance: Ask for a short pause in payments (such as 30–60 days) if your business is facing a temporary cash crunch due to seasonal slowdown, unexpected expenses, etc. but be aware that this may not resolve the lawsuit.
How to Approach Specialty Capital
- Be proactive: Contact them before you default if possible as this shows good faith and ask about options.
- Provide documentation: when necessary
- Use a professional: An experienced MCA attorney can guide you through this so you don’t make a misstep.
- Ask for written confirmation: Always get settlement or modified terms in writing before paying.
Specialty Capital phone number and address
You can reach Specialty Capital by calling (212) 369‑5060 or emailing them at info@specialtycapital.com.
Main Office Address:
60 Cutter Mill Rd, Suite 512,
Great Neck, NY 11021
How Can a Debt Settlement Attorney Help?
A debt settlement attorney can be invaluable when dealing with outstanding business debt, particularly MCA debt. An experienced debt help attorney can negotiate with creditors to potentially reduce the debt amount, provide legal guidance, represent you in court if needed, assist in validating the claimed debt, and ensure any settlement agreements are in your best interest.
Tayne Law Group offers a free no obligation initial phone consultation with one of our experienced team. Whether you’re struggling to keep up with your MCA payments, have a debt in collections, or have been sued by Specialty Capital, we may be able to help. Contact our offices by calling (866) 890-7337 or fill out our short contact form. We never share or sell your information and all conversations are confidential.
